Retirement Mandate Deadlines in 2023: A Guide for Small Business Owners
Author: Siân Killingsworth / 3 Jul 2023 / 401(k) Plan Information, Small Business 401k, State Mandated Retirement Plans
For small business owners, offering a retirement plan can be particularly advantageous. One significant benefit is the ability to attract and retain skilled employees. In competitive job markets, job seekers often consider not only their salary but also the overall benefits package offered by potential employers. A well-structured retirement plan can serve as a valuable incentive for prospective employees, making your business more appealing compared to others without such benefits. Likewise, existing employees are more likely to remain loyal to a company that invests in their future and offers a retirement plan, fostering a sense of security and commitment.
Moreover, in some states or regions, offering a retirement plan may be mandatory for businesses above a certain size or revenue threshold. Government regulations and labor laws may require employers to participate in state-run retirement programs or offer their retirement plans to employees. By complying with these regulations, small business owners can avoid legal issues and potential penalties while providing a valuable financial safety net for their workers.
Several states have already implemented retirement mandate deadlines to encourage small businesses to provide retirement benefits. As a retirement plan provider, it’s essential to stay updated on these deadlines to ensure compliance and support your clients effectively. Following are the deadlines to be aware of for 2023:
Oregon
- Deadline: July 31st for businesses with 1–3 employees.
- The OregonSaves program requires employers to facilitate retirement savings for their employees.
- Deadlines are determined by the number of employees. The more employees you have, the earlier deadlines will be.
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Connecticut
- Deadline: August 31, 2023
- Businesses with 5 or more employees must offer a retirement plan or provide access to MyCTSavings.
- Employers have the flexibility to choose between sponsoring their plan or offering a payroll deduction IRA.
Illinois
- Deadline: November 1, 2023
- Employers with 5–15 or more employees must offer a retirement plan or enroll in the Illinois Secure Choice Savings Program.
- The program allows employees to contribute a portion of their paycheck to an individual retirement account (IRA).
Own a small business? Here’s how to prepare for your upcoming state deadline.
Plan ahead
- Stay informed about retirement mandate deadlines in your state.
- Allocate resources and time to implement a retirement plan or enroll in a state-sponsored program.
Seek guidance from professionals
- Consult a retirement plan provider to understand the requirements and options available.
- They can guide you through the process, help choose the right plan, and ensure compliance with regulations.
Educate your employees
- Communicate the benefits of retirement plans to your employees.
- Provide resources and educational materials to encourage participation and empower your workforce to make informed decisions.
Assess the financial impact
- Evaluate the financial implications of offering a retirement plan or participating in a state-sponsored program.
- Consider tax incentives, cost-sharing options, and long-term benefits to make an informed decision.
The Benefits of a Ubiquity Small Business 401(k)
You may think, “Well, a state-sponsored plan might be the path of least resistance,” but there are several reasons a Ubiquity small business 401(k) might be a better solution for your business:
- Ubiquity 401(k) complies with your state mandate requirements, no guesswork required.
- It also saves more in personal and business taxes, while lowering your taxable income.
- Our plug-n-play payroll integration saves time and stress.
- Low, flat fees are your friend.
- As a private solution, a small business 401(k) plan through Ubiquity isn’t tied to the state (so it offers better protection of your assets).
As a small business owner, complying with retirement mandate deadlines is crucial not only for legal reasons but also for attracting and retaining top talent. By offering retirement benefits, you demonstrate your commitment to your employees’ financial security and wellbeing.
Stay proactive, seek professional guidance, and engage your workforce to ensure a smooth transition towards a secure future–no matter when your state’s deadline is.
